crowning
Well-known member
I've mined a couple of PoW/PoS currencies some months ago, and all went significantly down when PoW stopped and the miners couldn't mine any more.
Coincidence? Maybe. But I wouldn't take the risk...
Development Update - Oct 1, 2014
- Thread starter eduffield
- Start date
I've mined a couple of PoW/PoS currencies some months ago, and all went significantly down when PoW stopped and the miners couldn't mine any more.
Coincidence? Maybe. But I wouldn't take the risk...
Going back to Evan's proposal my position is still that I am in favour of variable masternode payouts on the condition that we do something to support mining diversity and profitability. I don't believe that a coin as young as Darkcoin is ready to turn its back on the mining community yet. If anything we should be providing a better mining environment.
Personally, I support the idea that if we can get rid of miners/pools etc we should go for it. They have been our single biggest headache.
Additionally, we have to accept the fact that Darkcoin is not for "everybody" and we are not trying to build communism or socialism. We all understand that there can never be equality but Darkcoin will always allow equal opportunity. Most of the people in the world still have the herd mentality of "I have nothing to hide so why do I need to be anonymous". Thus, whether we like it or not the main demand for Darkcoin services will come from the Darkweb businesses/customers, rich Chinese who want to take their wealth out of China (Nearly half of Chinese millionaires plan to emigrate from their communist homeland in the next five years), Russians and Iranians who will try to evade the sanctions, rich Americans who will want to evade FATCHA etc etc.
Additionally, we have to accept the fact that Darkcoin is not for "everybody" and we are not trying to build communism or socialism. We all understand that there can never be equality but Darkcoin will always allow equal opportunity. Most of the people in the world still have the herd mentality of "I have nothing to hide so why do I need to be anonymous". Thus, whether we like it or not the main demand for Darkcoin services will come from the Darkweb businesses/customers, rich Chinese who want to take their wealth out of China (Nearly half of Chinese millionaires plan to emigrate from their communist homeland in the next five years), Russians and Iranians who will try to evade the sanctions, rich Americans who will want to evade FATCHA etc etc.
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10 days left at max! if not earlier...
I'm still waiting for someone to explain to me why miners are worth four times as much to DRK as Masternodes.
Masternode tech makes miners a back-up solution. It's good to have a backup, but not at the current cost.
edit: miners, or indeed anyone already in the crypto scene, are not the target demographic. I see absolutely no reason to bend over backwards to cater to them at the expense services that provide real value to our target demographic - people who need financial privacy.
Masternode tech makes miners a back-up solution. It's good to have a backup, but not at the current cost.
edit: miners, or indeed anyone already in the crypto scene, are not the target demographic. I see absolutely no reason to bend over backwards to cater to them at the expense services that provide real value to our target demographic - people who need financial privacy.
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HammerHedd
Active member
Because at its essence, miners still create the currency. If you don't have a sufficient mining pool, you someone with high hashing power can still hijack the blockchain. If a "bad actor" was able to get >50% of the has power, they could theoretically be able to force masternode voting to go to their own nodes. If this happened, then neither the masternode security nor the coin generation security would matter.
I just wanted to say that neither Rome nor Bitcoin was built in a day. I think we get too wrapped up in the short term returns sometimes. Let's remember that it will take a while for this coin to catch on, and it will take longer to have a sufficient monetary base to support 2000+ masternodes and still have coins flowing freely for use as actual currency.
Also, one other note - while we talk about rich people trying to evade taxes with anonymous currency, let's also talk about the (potential) ability for people in places like syria to be able to preserve whatever assets they have left, or for their relatives who managed to get out to send money in for people living like refugees. Perhaps someone should look into setting up a darkcoin donation for the Ebola epidemic in Liberia. After all, Masternodes also help prevent the spread of deadly diseases.
1. Did you miss the part that Masternodes can do everything miners can do, just as securely, and there's no actual need for petaflops of compute power to maintain the blockchain? What you are describing here is miners as a liability, not a good argument for maintaining them.
2. A 'sufficient monetary base?' What does that mean? 2000-3000 Masternodes (which Evan wants, and I'm happy to agree with him) will not happen while 80% of block reward goes to miners, who as of the near future with InstanTX will simply be a backup mechanism. Does your personal backup plan (for anything, IT related or otherwise) cost 4 times as much as your daily use kit?
3. Completely agree. :smile:
I suppose that the unsaid objective is to, at one point, with enough assurance regarding the whole POSe concept, to completely get rid of the miners and only use the MN to validate the blockchain.
I think this could be terrific and really unique in the cryptos world.
EDIT: not everyone agrees apparently, but I think the whole mining concept is much more flawed, it is a gigantic waste of energy by non-committed business men that dump DRK on daily basis on the markets
I think this could be terrific and really unique in the cryptos world.
EDIT: not everyone agrees apparently, but I think the whole mining concept is much more flawed, it is a gigantic waste of energy by non-committed business men that dump DRK on daily basis on the markets
I'd.like to suggest to create the list of CONS & PROS why MNs should take 100% of the block reward and lets see what Evan thinks all about it.
Is it a good idea or rather is it better to stay as it is???
CONS:
PROS:
Do not hesitate to express your opinions guys.
Is it a good idea or rather is it better to stay as it is???
CONS:
PROS:
Do not hesitate to express your opinions guys.
Hmm...I actually DID miss this part.
This seems like a very strong assertion. How to be so confident that a masternode election process will provide a consensus mechanism strong enough to withstand all of the creative doublespend, hacking, and takedown attacks that the world's most creative hackers might mount? It is so...untested. We don't know the edge cases. We don't know just how creatively malicious masternodes might be made to operate if they were solely responsible for the underlying consensus system.
Over the past 5 years the use of proof-of-work mining to reach consensus on a shared accounting ledger (i.e., Bitcoin's core breakthrough, it's solution to the Byzantine generals' problem) has gone through its own series of strains and stresses, yet has amazingly emerged intact, albeit with plenty of battle-scars. I don't take that success lightly. I don't claim to have the intellectual chops to immediately evaluate whether a masternode election system is an alternate solution to the Byzantine generals' problem -- but I sure am skeptical at the outset!
Please think very carefully before moving this amazing cryptocurrency over to an entirely untested method for securing the very accounting ledger. It would only take one breakdown that destroys consensus on who controls which coins to undermine confidence in this coin.
HinnomTX
Active member
Ok, here are my two cents (having digested most of the proposals here).
1. Changing the coin dynamics at this stage is risky and appears a bit fascist to newcomers sizing up the coin. I think we should keep the mining PoW as-is or close to the status quo.
2. We don't know how the masternode count will change once enforcement is on. We will almost surely see increased participation once the potential masternode operators know they will receive the full 20%. Getting passed up for payments is quite a disincentive (psychologically stronger than it should be). The same is true for variance but we may have to live with that.
3. There are plenty of big DRK holders (just look at the rich list) and small DRK holders (look at comments on here and BCT) who don't know how to run a MN but want an easier way to participate without taking on the risk of losing coins. 'Leased forging' is a concept from NXT that was discussed earlier and could open the door for a flood of new masternodes.
4. I am in favor of growing masternode count organically. We have a system that is designed to support increased MNs over time. Because we are rewarding 20% of payouts to masternode operators AND 20% of the coin is used for masternodes, the number of masternodes should increase by ~200 per year (yes I'm ignoring the 7% annual coin production decrease for now). This growth won't increase the diversity of masternode holders but will offer improved DOS protection, especially if you look three years out where 600 new masternodes would be a huge benefit.
5. I have not heard a convincing argument why the existing ~900 or so masternodes are not sufficient to move forward with InstantX. If these nodes move to an encrypted communication mesh and don't share IPs, the network should be much more robust than where we stand today.
6. Recall that, in the original proposal for masternodes, the tuning mechanism for masternode count was: DRK price drops -> people buy coin and start MNs; DRK price rises -> people stop MNs and sell coins. Has this somehow been shown to be invalid? (Personally, I'm accumulating coins now to get ready to start another MN).
Full disclosure. I manage my own masternodes, and I left the mining business a few months ago because it was affecting my family life.
crowning
Well-known member
Exactly my points, full agreement!
Maybe you shouldn't have housed your mining farm in the bedroom....wives don't like that :tongue:
JGCMiner
Active member
Great points! Especially 4. Growing organically is what's best for the coin. Furthermore, if the DRK/fiat rate increases then we will pick up even more MNs than you estimate (as whatever it costs to run a MN is paid in fiat).
In addition to what you said, my main concern would be the distribution of the currency. For all the issues with mining pool centralization, POW is excellent at distributing the coin. Since MNs began to get paid in late June I would wager 500-700 people people run or have run MNs... if more than a order of magnitude more people at one point or another connected a worker to a mining pool and got some DRK I wouldn't be surprised. They wouldn't have got a lot of coins, but the result it is far better distribution than having the currency going only to a few hundred people.Thus, cutting out the miners basically creates a walled garden where only those who have a lot of coin get a lot more coin. Plus, since MN owners are incentivized to hold (i.e. save for the next MN) then due to poor liquidity it will be exponentially more expensive for the next person to buy 1000 DRK.
In short, DRK is a currency and for a currency to succeed it needs to grow its network effect through adoption. If you are going to artificiality limit who receives generated coin to those who already have a lot of coin, then it is not much better than the "good 'ol boy" banking system where the rich get richer and the little guy gets screwed. Miners may not be 4x more important to the network compared to MNs, but once you look at the distribution side of things you see why POW is very important and why the the current split is better left alone.
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Propulsion
The buck stops here.
Getting rid of miners entirely is one of the worst ideas possible.
If the masternodes are the only entities that create coins, then the currency has just become 100% Proof of Stake.
Some of you are going "Hey that's great, I have MN's lets do this!" Let me try to explain why that's a bad line of reasoning. If Darkcoin becomes 100% Proof of Stake from MN's being the only entity that create the coins, people who do not own any MN's will not be able to create them. Only the wealthy (MN owners) will generate them, creating an unfair distribution of wealth where the rich become richer. Awful.
As it is now, anyone can hop on a pool and receive coins even with a simple GPU. That's good; because the small time miner can become part of the ecosystem without being rich. Like georgem said on BCT Darkcoin would become "Elitist Coin" or "Only the Rich Coin" because you are ostracizing all small time people completely out of it. It would effectively become a giant pyramid scheme.
pyr·a·mid scheme
noun
In August the average cost of a T1.micro running only the daemon cost me $22.00 The average return on the MN's were 14 darkcoin per month.
(on average again) The USD price from August 1st to August 31st was $3.96.
Making the total sum of Darkcoin received from one MN in August equivalent to $55.44.
Return on investment from one MN in August was $33.44 or 152%!
Since we now know some good average numbers for MN's, lets take a look at mining. First we need the average difficulty for the month of August.
For the sake of simplicity, the average difficulty for mining was 5000. We will use the same numbers above to calculate the average Bitcoin Price and Darkcoin price as well.
I'm going to quote Ignition75 here and use his figures:
Nvidia 750ti times 6 equalling 15.5Mh/s at 360 watts returns 8 darkcoin a month. Yet, the initial investment would be $135 x 6 = $810 for graphics cards alone. Add the rest and let's say $1100.00 to mine conservatively.
It would of cost $2200.00 to equal the earnings of a MN back in August.
$2200 for Miners.
$4000 for MN's.
Now you might go "Holy hell, it cost almost double for MN's to operate compared to Miners!" Yet the truth is, mining equipment is extremely more difficult to maintain and operate compared to a MN. Hardware failures, electricity cost, and initial upfront hardware cost before getting anything all have to be factored in.
In summary, I think the current system is great. Miners are securing the network with hashing while MN's are providing the privacy. It's a one of a kind hybrid system that at this point in time in my opinion, doesn't need to be messed with.
If the masternodes are the only entities that create coins, then the currency has just become 100% Proof of Stake.
Some of you are going "Hey that's great, I have MN's lets do this!" Let me try to explain why that's a bad line of reasoning. If Darkcoin becomes 100% Proof of Stake from MN's being the only entity that create the coins, people who do not own any MN's will not be able to create them. Only the wealthy (MN owners) will generate them, creating an unfair distribution of wealth where the rich become richer. Awful.
As it is now, anyone can hop on a pool and receive coins even with a simple GPU. That's good; because the small time miner can become part of the ecosystem without being rich. Like georgem said on BCT Darkcoin would become "Elitist Coin" or "Only the Rich Coin" because you are ostracizing all small time people completely out of it. It would effectively become a giant pyramid scheme.
pyr·a·mid scheme
noun
- a form of investment (illegal in the US and elsewhere) in which each paying participant recruits two further participants, with returns being given to early participants using money contributed by later ones.
In August the average cost of a T1.micro running only the daemon cost me $22.00 The average return on the MN's were 14 darkcoin per month.
(on average again) The USD price from August 1st to August 31st was $3.96.
Making the total sum of Darkcoin received from one MN in August equivalent to $55.44.
Return on investment from one MN in August was $33.44 or 152%!
Since we now know some good average numbers for MN's, lets take a look at mining. First we need the average difficulty for the month of August.
For the sake of simplicity, the average difficulty for mining was 5000. We will use the same numbers above to calculate the average Bitcoin Price and Darkcoin price as well.
I'm going to quote Ignition75 here and use his figures:
Nvidia 750ti times 6 equalling 15.5Mh/s at 360 watts returns 8 darkcoin a month. Yet, the initial investment would be $135 x 6 = $810 for graphics cards alone. Add the rest and let's say $1100.00 to mine conservatively.
It would of cost $2200.00 to equal the earnings of a MN back in August.
$2200 for Miners.
$4000 for MN's.
Now you might go "Holy hell, it cost almost double for MN's to operate compared to Miners!" Yet the truth is, mining equipment is extremely more difficult to maintain and operate compared to a MN. Hardware failures, electricity cost, and initial upfront hardware cost before getting anything all have to be factored in.
In summary, I think the current system is great. Miners are securing the network with hashing while MN's are providing the privacy. It's a one of a kind hybrid system that at this point in time in my opinion, doesn't need to be messed with.
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eduffield
Core Developer
I like Proof-of-work, I think it's important for keeping the ecosystem healthy. In balance with a proof-of-service system, I think we'll do well.
Benefits of proof-of-work:
- In a pure proof-of-stake system, the coins are distributed to only the ones that are invested. In a proof-of-work system, you have a wider base of people receiving compensation.
- Proof-of-work sets a price due to the electricity cost of producing the coins.
Proof-of-stake:
- Would require that all masternode operators have their money on a "hot" node. I think one of the best things about the current masternode system is the fact that you can run a masternode with no money in it.
- Also has a incompatibility with proof-of-service, in the existing system we can enforce that ports are open to get paid, or that masternodes are processing Darksend transactions successfully (it doesn't do this currently, but it can in the future).
Solution: Sync a common list across the whole network. Payee and payment amount can be enforced this way, and the reward will increase for 1 1/2 years. First adjustments are 5%, followed by 2.5%, then the last few adjustments are 2.5% every 2 months.
Code:
https://github.com/darkcoin/darkcoin/commit/ad59f33e44620cbaa44f33d25d22cac1329beff6
We can start updating testnet and testing this. This will be the last hard fork for months (the next one will be for later revision of InstantX, which is months away.)
Benefits of proof-of-work:
- In a pure proof-of-stake system, the coins are distributed to only the ones that are invested. In a proof-of-work system, you have a wider base of people receiving compensation.
- Proof-of-work sets a price due to the electricity cost of producing the coins.
Proof-of-stake:
- Would require that all masternode operators have their money on a "hot" node. I think one of the best things about the current masternode system is the fact that you can run a masternode with no money in it.
- Also has a incompatibility with proof-of-service, in the existing system we can enforce that ports are open to get paid, or that masternodes are processing Darksend transactions successfully (it doesn't do this currently, but it can in the future).
Solution: Sync a common list across the whole network. Payee and payment amount can be enforced this way, and the reward will increase for 1 1/2 years. First adjustments are 5%, followed by 2.5%, then the last few adjustments are 2.5% every 2 months.
Code:
https://github.com/darkcoin/darkcoin/commit/ad59f33e44620cbaa44f33d25d22cac1329beff6
We can start updating testnet and testing this. This will be the last hard fork for months (the next one will be for later revision of InstantX, which is months away.)
Propulsion
The buck stops here.
eduffield Your solution "to sync a list across the whole network." Do you mean you are taking every single MN into account and distributing the 20% MN reward to every MN?
Are you also proposing to increase the block reward; As it is now with 5 darkcoin per block, are you proposing 5.25 per block with the same 20% to MN's 80% to miners?
Are you also proposing to increase the block reward; As it is now with 5 darkcoin per block, are you proposing 5.25 per block with the same 20% to MN's 80% to miners?
TaoOfSatoshi
Well-known member
Wonderful! Now we can put this debate to bed, and move on....:grin: